Ch. 4: Demand

Which economic term is defined as the desire to have a good or service and the ability to pay for it?

• complement

• demand

• elasticity

• substitute

Which of the following restates the law of demand?

• When prices go down, demand increases; when prices go up, demand decreases.

• When prices go up, demand increases; when prices go down, demand decreases.

• When prices go down, quantity demanded increases; when prices go up, quantity demanded decreases.

• When prices go up, quantity demanded increases; when prices go down, quantity demanded decreases.

What is a demand schedule?

• a. a table showing how much of a product an individual is willing and able to buy

• b. a table showing how much of a product a market is willing and able to buy

• c. a graph showing how much of a product an individual is willing and able to buy

• d. a graph showing how much of a product a market is willing and able to buy

What is a demand curve?

• a. a table showing how much of a product an individual is willing and able to buy

• b. a table showing how much of a product a market is willing and able to buy

• c. a graph showing how much of a product an individual is willing and able to buy

• d. a graph showing how much of a product a market is willing and able to buy

What does a market demand curve show?

• the effect of market research on consumer purchases

• the sum of all the individual demand curves in a market

• the sum of all the market demand schedules in a community

• the effect of advertising on consumers on a market

Which of the following outside forces affect your demand for products?

• Economic conditions

• Personal preferences

• Company policies

• Product quality

What is the difference between a substitute and the substitution effect?

• A substitute is a good that can be used in place of another, while the substitution effect is the change in consumption resulting from a change in relative prices.

• A substitute is a change in consumption resulting from a change in relative prices, while the substitution effect is a good that can be used in place of another.

• A substitute and the substitution effect are the same, both referring to goods that can be used in place of another.

• A substitute and the substitution effect are the same, both referring to changes in consumption resulting from a change in relative prices.

What is elasticity?

• the amount of variability in consumer prices under normal conditions

• the measure of how often consumers change their minds

• the amount by which businesses can raise prices without losing customers

• the measure of how responsive consumers are to price change

If quantity demanded changes significantly when price changes, how is demand described?

• elastic

• inelastic

• constant

• inconstant

How does the slope on an elastic demand curve look?

• steep slope

• shallow slope

• vertical line

• horizontal line